The impact of internal audit function characteristics on internal control quality

Oussii, Ahmed Atef; Taktak, Neila Boulila

doi:10.1108/maj-06-2017-1579

Cited by 74 publications

(91 citation statements)

References 70 publications

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“…Carcello et al (2017) find that IA improves risk management; while Lin et al (2011) document in their study that IA helps to improve internal control systems. Oussii and Taktak (2018) show also a positive effect from IA on the quality of the internal control system. In this context, stricter environmental regulations and rising expectations for corporate sustainability have become a very recent subject for the internal control topic.…”

Section: Internal Auditing and Improvement Of The Performancementioning

confidence: 74%

What is the value of internal auditing? – A literature review on qualitative and quantitative perspectives

Eulerich¹,

Eulerich²

2020

MAB

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In recent years, research on internal audit has developed significantly. Numerous papers have discussed the importance of internal auditing (IA) as a central pillar of the corporate governance system. Through its activities, IA supports the Audit Committee and the CEO/C-Level. As an independent, objective assurance and advisory function, it is designed to add value through the audit of the internal control system, risk management and the governance processes. Interestingly, research on internal audit unfortunately rarely corresponds to these added value concept defined in the core responsibilities. Therefore, this literature review attempts to highlight the possible perspectives of the added value discussion and to help define future research avenues.

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Section: Internal Auditing and Improvement Of The Performancementioning

confidence: 74%

What is the value of internal auditing? – A literature review on qualitative and quantitative perspectives

Eulerich¹,

Eulerich²

2020

MAB

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“…IA performance standard (IIA, 2017) requires the chief audit executive to establish a follow-up process for monitoring the previously identified internal control deficiencies and ensuring that management actions have been effectively implemented or that senior management has accepted the risk of not taking any action. Studies in the literature argue on the positive influence of the existence of a followup process of the status of audit findings and recommendations on the improvement of IAF effectiveness (Mihret & Yismaw, 2007), (Oussii & Taktak, 2018).…”

Section: Iaef18 Existence Of a Follow-up Processmentioning

confidence: 99%

Internal audit effectiveness: operationalization and influencing factors

Türetken

Jethefer

Özkan

2019

MAJ

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Purpose The purpose of this paper is to introduce a framework that presents how internal audit effectiveness can be operationalized and what factors are available to influence the effectiveness. Internal audits have become one of the key practices for organizations to control the adherence of their processes to standard procedures and regulations. The benefits of conducting internal audits are well acknowledged in the literature. However, it is difficult for organizations to assess the effectiveness of internal audits and to understand the factors that influence audit effectiveness. Design/methodology/approach A systematic literature review was conducted to identify relevant publications and collect and synthesize evidence on the operationalization of internal audit effectiveness and the factors that potentially influence the effectiveness of internal audits. Findings A thorough analysis of the relevant studies resulted in a comprehensive list of indicators used for the operationalization of audit effectiveness and a list of potentially influencing factors. The results of the systematic review are synthesized into a framework. Research limitations/implications The researchers should consider this study as a comprehensive source that offers pointers on the factors investigated in the literature and a basis for future research in this field to address the gaps that are identified. Practical implications Awareness about how the effectiveness of internal audits can be measured, and the factors that can potentially influence this effectiveness can help organizations to understand their current performance and ultimately improve it in the future. Originality/value The contributions of this study will help in better understanding the state of the research on internal audit effectiveness, including the influential factors, and gaps and opportunities for future research.

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“…The internal audit function, the third governing tool has the potential as important a role as external auditors in securing the company's financial statements (Oussii & Boulila Taktak, 2018;Janvrin, 2008;Endaya & Hanefah, 2016). Although historically, the internal audit function is regarded as a non-independent activity (unlike external auditors), the Institute of Internal Auditors (IIA) starts defining Internal audit as an independent activity (IIA, 2017).…”

Section: Theoretical Framework and Literature Reviewmentioning

confidence: 99%

The Need for Audit Trinity Report to Reinforce Financial Reporting Integrity

Shbeilat¹

2018

AFR

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Investors’ reliability on financial statements decreases due to continuing corporate scandals. Many of these rogue listed companies have had dominant shareholders who have circumvented internal controls for personal gain or have hidden poor management using misleading reporting. This has led to calls for restructuring the annual financial report and to fill the gap of corporate governance constituents. This study aims to highlight the importance of combining the efforts of the audit trinity (those are: the audit committee, the external auditor and the internal auditor) in securing the financial reporting system and corporate governance. This literature-based study suggests coordinating and integrating the efforts of the audit trinity and the issue a joint report addressing all matters related to (1) safeguarding company’s assets and accounts (2) ensuring that financial statements and the annual report are fair, balanced and reliable, and (3) ensure the entity’s compliance with applicable laws, corporate governance code, and accounting and auditing standards. The proposed joint report is to be signed by the audit trinity and certified by the chairperson of the board. The development of this report went through two stages, the first one, reviewing related literature, internationally recognized frameworks and corporate governance best practices, and related international standards on auditing; the second stage was sending the draft of the proposed report to 20 expert referees requesting their comments on the structure and the appropriateness of the proposed report. The proposed report helps by clarifying the communication mechanism, responsibilities and powers of the audit trinity that enable them to adequately discharge their duty of maintaining corporate accountability and securing the financial reporting system. It also addressed the need to have informed and stringent control over the quality of financial ‎reporting and avoidance of conflicts of interest‎.

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The impact of internal audit function characteristics on internal control quality

Cited by 74 publications

References 70 publications

What is the value of internal auditing? – A literature review on qualitative and quantitative perspectives

What is the value of internal auditing? – A literature review on qualitative and quantitative perspectives

Internal audit effectiveness: operationalization and influencing factors

The Need for Audit Trinity Report to Reinforce Financial Reporting Integrity

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